Mass. ExodusA new law in Massachusetts that took effect on Jan. 2, which limits fees and yield spread compensation and imposes other restrictions on mortgage broker originations, has at least 15 wholesale lenders modifying or curtailing operations and has brokers scrambling.
But the reasons why lenders, which include Wells Fargo and IndyMac, are taking these steps and the impact on mortgage originations and employment is in dispute.
"It's going to curtail the availability of credit for all mortgage lending – subprime, prime, refinances, equity loans," Paul Richman, vice president for state government affairs at the Mortgage Bankers Association, told MortgageDaily.com. "And the cost of credit is going to go up in order for lenders to protect their potential for legal liability.
Further, it's going to have some affect on both industry employment and, because people who want to take jobs in Massachusetts won't be able to buy homes, it will have an affect on general employment."
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Submitted by Ed Cage, Plano Texas / firstname.lastname@example.org